Negotiating a short sale, where the homeowner owes the mortgage company more than the house will sell for, is much different than your typical home sale. And, in these days where first and second mortgages are the norm, it's even more complicated.

So today I was happy to get verbal approval from a lender on a short sale for one of my clients. Negotiating with this many parties is a slow and painful process. But when you get a result in the end that's good for everyone it's a very satisfying thing!

There are a lot of very discouraged sellers and a lot of sellers on the verge of foreclosure. With an aggressive plan, implemented early enough, that usually doesn't have to happen.

I love happy endings!

Also, a brief note here that the detailed Fauquier and Culpeper county market statistics are now available in the categories for those counties as well as in the Local Market Conditions category.

Rappahannock and Prince William will be posted there tomorrow.

Since foreclosures are still rising in our area and since it's a fairly complex subject, I thought we'd talk about one aspect of it today. If you owe more to the bank than your house is worth there are a range of possible remedies. The worst one, by any measure, is foreclosure. You should definitely be working to avoid that if at all possible.

A slightly less worse option is deed in lieu of foreclosure. In this scenario the bank isn't coming after you to take the house. You're going to them, keys in hand, and saying "It's all yours! I can't make the payments any more."

The reason this is a slightly better choice for the borrower is that it looks less bad on your credit report. It is better because you have stepped forward rather than the bank having to come after you. It may also benefit you financially in the sense that the lender may be more willing to negotiate more favorable financial terms on the difference between what you owe and what the house is worth. That's because they didn't have to spend the money that a formal foreclosure process would have cost them.

There's another advantage in this for most people. When you're in this situation the last thing you need to see is your name in the paper as going through foreclosure. This allows you to keep the entire transaction a little more private.

You should also know that if you decide to go this route, you can't call the mortgage company up, let them know the keys are in the house and walk out. You will need to send them a letter telling them you're requesting deed in lieu of foreclosure. I would also recommend that you provide some information about the circumstances that make this a necessity. It is not a bad idea to involve an attorney to help you in this process. But I realize that if you're in this situation attorneys fees may be completely out of reach.

This is one option if you're in a tough spot. There are others. Every situation is unique and the best thing to do is to talk to a real estate agent about your particular situation so you can discuss each option, the pluses and minuses and get help in making the wisest decision for you and your family.

I spent most of the day today learning as much as possible about foreclosures. Unfortunately, it's become clear that we're going to continue to see a lot of activity in this area. While I have a basic level of knowledge on the subject, I obviously will need more indepth knowledge going forward.

The class was taught by Phil Drew at Carteret Mortgage and it was excellent! Not everyone who knows their subject matter is able to convey it effectively. But Phil is clearly a gifted teacher.

What I really appreciated today was the detailed information on how to help your clients avoid foreclosure in the first place. A great deal of the class was spent on this. And while there are lots of details and an involved process, the most important thing to know there is to start as soon as there's even a hint of a problem. Early intervention clearly makes a big difference here.

From what I've seen most consumers who end up with a problem know woefully little about any of this. And, too often, the real estate agents they could potentially turn to don't know much more! Perhaps there's been no training in this because the market was so hot for so long everyone forgot what can happen. But I'd like to see an effort to make some kind of training on this subject part of the curriculum for every real estate agent. And I'd like to see it early in their careers.

Now is the time to work on this. Right now I know my peers agree with how much we all need this information and how much earlier we wish it had been available.  But the urgency will fade quickly when the market changes again.

In the meantime, I'm now in a much better to help clients who are worried about the possibilities of foreclosure. I have a better grasp of what negotiating strategies are effective with lenders, how to better protect my clients credit rating as well as their financial position after the house is sold or foreclosed. I'll never feel good about having to use this information. But I'm very grateful that I'll be better help to my clients when they need it!